HKSAR v. CHAN SIU MAN AND ANOTHER

CACC 421/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 421 OF 2010

(ON APPEAL FROM DCCC NOS. 930 AND 1442 OF 2009)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Hartmann JA (giving the judgment of the Court):

Introduction

1.  On 29 October 2010, after a trial in the District Court before Judge Remedios, the first and second applicants were convicted of one charge of conspiracy to offer an advantage to an agent, contrary to section 9(2)(a) of the Prevention of Bribery Ordinance, Cap. 201.

2.  The first applicant was in addition convicted of two further charges of conspiracy to offer an advantage to an agent, one charge of conspiracy to defraud, contrary to common law, and one charge of fraud, contrary to section 16A of the Theft Ordinance, Cap. 210.

3.  The first applicant was sentenced to a total of three years’ imprisonment.  The second applicant was sentenced to a term of 16 months’ imprisonment.

4.  The first applicant sought leave to appeal his sentence.  The second applicant sought leave to appeal his conviction.

5.  We heard the application of the second applicant first.  Having heard submissions, we allowed his application and, treating the application as the appeal itself, we quashed the conviction, setting aside the sentence.

6.  We said that we would give our reasons later and do so in these Reasons for Judgment.

7.  In light of the fact that the second applicant’s conviction had been set aside, the first applicant sought an adjournment of his application for leave to appeal sentence so that he could consider whether that change in circumstances would allow him to advance further grounds of appeal.  We granted the application for an adjournment to a date to be fixed.

8.  The application of the first applicant is not therefore the subject of these Reasons for Judgment.

Background

9.  At all material times, the first applicant was the Chairman of the Hong Kong China Bodybuilding and Fitness Association (the Hong Kong Association).  The second applicant was a Hong Kong bodybuilding athlete, recognised as an elite competitor in international competitions and affiliated to that Association.

10.  The Asian Bodybuilding and Fitness Federation (the Asian Federation) oversees bodybuilding in Asia, having some 40 affiliated members, including the Hong Kong Association.  The international governing body of the sport of bodybuilding is the International Federation of Bodybuilding and Fitness (the International Federation).  It has over 180 affiliated regional and national federations.

11.  As with so many other sports, bodybuilding is subject to the ills of doping, that is, to the impermissible use by athletes of performance enhancing drugs.  The World Anti-Doping Agency is an international organisation set up in order to coordinate the fight against doping in sport.  It is the producer of the World Anti-Doping Code (‘the WADA Code’) which is accepted by more than 1,200 sports-related bodies around the world.  In respect of bodybuilding, the WADA Code has been recognised by the International Federation.  Both the Asian Federation and the Hong Kong Association are subject to the Code.

12.  When bodybuilding competitions are held in Asia, the top five winners in all categories of competition are subjected to drug tests.  In respect of each athlete, the results of his test are forwarded to the Asian Federation which is then obliged to notify the International Federation and also the national body to which the athlete is affiliated.

13.  According to the WADA Code, an athlete who fails a doping test will be suspended from competition for two years for the first violation and for life for a second violation.  As to the national body to which the athlete is affiliated, the rules of the Asian Federation state that the national body will itself be fined US$2,000 for the first offence by an athlete and US$3,000 for the second offence.

14.  There is no stipulation in the WADA Code or the rules of either the International Federation or the Asian Federation that a period of suspension can be set aside or shortened by the payment of a fine.

15.  In October 2005, the Hong Kong Association sent a team of athletes to the 40^th Asian Mens’ Bodybuilding Championships in South Korea.  The games were organised by the Asian Federation.

16.  The second applicant won a gold medal in the welterweight category while two other Hong Kong athletes also won medals.  In the result, they were required to submit urine samples.  All three athletes were found to have traces of banned substances in their urine including Clenbuterol, a type of steroid.

17.  The results of the drug tests were sent to the Secretary-General of the Asian Federation, a man by the name of Chua, who in turn wrote to the Hong Kong Association.  In terms of his letter, the second applicant was suspended from participating in any bodybuilding competitions for two years.  In respect of the other two athletes, one was also suspended for two years while the other, this being his second offence, was banned for life.  In addition, as this was the second time that an athlete affiliated to the Hong Kong Association had been found guilty of taking banned substances, the Association itself was fined a total of US$9,000.

18.  It was the prosecution case, and the judge so found, that, to enable the three athletes to continue to participate in competitions, more especially the 2006 Doha Asian Games, the first applicant, as Chairman of the Hong Kong Federation, conspired separately with each of the three athletes to pay a bribe to Chua, the Secretary-General of the Asian Federation, in return for which Chua would arrange matters so that the suspensions would be reduced in length or not put into effect at all.

19.  At trial it was accepted that none of the suspensions had been put into effect.  In the result, the second applicant was able to compete at the 2006 Doha Asian Games and won a medal.

20.  The second applicant was charged only with the first charge on the indictment.  That charge alleged that he and the first applicant had conspired together with the coach of the Hong Kong bodybuilding team, a man named Ho, to pay a bribe of US$10,000 to Chua so that the second applicant’s two-year suspension would be reduced or lifted entirely.  The first charge was to the following effect, namely, that the two applicants -

“… between January 2006 and December 2006, in a Hong Kong, conspired together with Ho Ling Kwong, without lawful authority or reasonable excuse, to offer an advantage, namely, a gift, loan, fee, reward or commission in the sum of US$10,000, to Paul Chua, being an agent, namely the Secretary-General of the Asian Bodybuilding and Fitness Federation, as an inducement to or reward for or otherwise on account of the said Paul Chua’s doing or having done an act in relation to his principal’s affairs or business, namely shortening or lifting the period of suspension of participating in any bodybuilding competition imposed on [the second applicant] and enabling [the second applicant] to participate in the 2006 Doha Asian Games.”

The second applicant's grounds of appeal against conviction

21.  On behalf of the second applicant, Mr Davies advanced two grounds of appeal.

22.  The first ground was to the effect that the judge had erred in finding as a fact that the applicant must have known that he had tested positive for banned substances at the championships held in South Korea in October 2005 and that therefore he was under suspension.

23.  We were satisfied that there was nothing in this ground.  It was never in issue at trial that the applicant had been informed by Ho, his coach, that the Hong Kong Association had received notice from the Asian Federation that he had tested positive for drugs and that, unless a fine was paid, it was certain that his suspension would endure for the full two years and he would thereby be unable to compete in the 2006 Doha Games.  The applicant’s subsequent actions, including the admitted payment of moneys by way of a fine, were only explicable in the context of his acceptance of this information.

24.  In our judgment, there was far greater substance in the second ground of appeal and it was in respect of that ground that we allowed the second applicant’s appeal, quashing his conviction and setting aside his sentence.

25.  The second ground was to the effect that the judge had erred in finding that the applicant must have been aware of the administrative and disciplinary rules of the various bodies that regulated the sport of bodybuilding and inferring from that the applicant must therefore have been aware that his agreement to pay a fine in order to have his suspension reduced or lifted amounted in fact to an agreement to pay a bribe to the Secretary-General of the Asian Federation.

26.  Although, when arrested, the applicant had given a fairly lengthy video recorded statement which was introduced into evidence at trial, he did not himself testify at trial.

27.  In the course of his video-recorded interview, the second applicant said that he had been shocked to be informed that the urine sample that he had given at the games in South Korea had proved positive for banned substances and that he had been suspended.  While he was keen to participate in the 2006 Doha Asian Games, he could not understand how he had to pay a fine far higher than the fine that, rightly or wrongly, he understood athletes would have to pay if they tested positive, that is, a fine of US$2,000. In this regard, in the course of the interview, he said:

“… I mean, I found that was really unreasonable, so I, well, I said, “fine, I’ll pay for the fine, I’ll pay if required, I’ll pay you, but let me tell you, I’m retiring.” Something like that.”

28.  The applicant admitted that it went through his mind at that time that his own administrators were attempting to ‘frame him’ in some way. 

29.  That being said, even if the applicant protested that at that time he believed he was being manipulated in some way in order to extract money from him, money that had been paid to him by Government institutions to enable him to train as a full-time athlete, at no time in the course of the interview did he admit or indicate that he understood that the fine that he was being asked to pay was in reality a bribe to be paid to Chua or other senior personnel in the Asian Federation.

30.  Aside from the contents of the cautioned statement, the principal evidence against the second applicant was contained in the testimony of Ho, the coach of the Hong Kong team.

31.  Ho testified for the prosecution under immunity. Ho had himself been a bodybuilding athlete and in addition had worked in the administration of the sport before taking on his job as coach.  He therefore had knowledge not only of the rules of competition but also of the administrative and disciplinary rules administered by those bodies which regulated the sport.

32.  It was Ho’s testimony that the first applicant, as Chairman of the Hong Kong Association, had informed him of the positive drug tests and the suspensions imposed.  The first applicant had also informed him that if the athletes were prepared to pay fines – the amount due by the second applicant being US$10,000 – that would ensure a successful appeal and their suspensions would be lifted or reduced, allowing them to compete in the 2006 Doha Asian Games.

33.  Ho testified that, to his knowledge, there was no provision in the rules of the Asian Federation allowing for the payment of fines as a form of substitute for suspension.  He understood, therefore, that the moneys paid as fines were in fact bribes payable to Chua, he being the person of sufficient seniority in the Asian Federation to arrange for the lifting of the suspensions.

34.  Importantly, Ho testified that his understanding was fortified by the fact that at the Bahrain Games in 2004 Chua had informed him that one of the Hong Kong athletes who had admitted to taking banned substances would be suspended.  However, after arrangements had been made for the athlete to pay a fine of US$1,000, his suspension had not been put into effect.

35.  Ho, who the judge found to be a “forthright and truthful witness”, testified that he telephoned the second applicant to inform him that he had tested positive for banned substances and had been suspended for two years.  He then told the second applicant that he was required to pay a fine of US$10,000 so that an appeal could be lodged on his behalf and his suspension lifted.  The second applicant, he said, protested that it was simply not possible for him to have tested positive.

36.  Ho testified that the second applicant also told him that he had “asked someone to check the rules of [the Asian Federation] and there was no mention of a fine”: paragraph 232 of the Reasons for Verdict.

37.  According to Ho, he assured the second applicant that he had no need to bother and that, once he had paid the fine of US$10,000, he would be able to participate in the Doha Asian Games.  As the judge expressed it in her Reasons for Verdict (paragraph 232):

“D2 [The second applicant] asked “is it for certain that I can participate in the Doha Games once I pay the fine?” Ho assured him “yes because D1 [the first applicant] told him as such”. D2 doubted about what Ho said, so Ho told him that he could ask D1 directly if he did not believe him. He did not hear from D2 after that but chased him, D2, to pay the fine when he saw him at a training session sometime in 2006.”

38.  At no time in the course of his testimony did Ho say that he confided, directly or indirectly, in the second applicant that to his knowledge the fine was in fact a bribe payable to senior personnel at the Asian Federation who had the power to lift the suspension.  At no time did he testify that he had confided in the second applicant that a similar payment of a fine at the 2004 Bahrain Games had, with the intervention of Chua, resulted in a similarly successful result.  He kept this knowledge to himself.

39.  Of equal significance is the fact that at no time in the course of his testimony did Ho say that he informed the second applicant that, to his knowledge, there was simply no power vested in the Asian Federation – by whatever means, by way of appeal or review or by way of granting clemency – to lift his suspension.

40.  On a more general basis, Ho did testify that he had told the athletes who he trained (which would have included the second applicant) to read the rules of the Asian Federation.  That being said, there was no evidence that the second applicant had followed such instruction.

41.  As to the second applicant’s knowledge of the rules – and it is to be remembered that between the regulatory bodies there were several different sets of rules related to a range of different matters – in his video-recorded interview the second applicant said that he was not sure of them.  For reasons to which we shall refer, this was an assertion which the judge rejected.  It was further the evidence of Ho that the second applicant had told him, not that he had personally acquainted himself with the rules, but that he had asked a third party to do so and that he had been told that the rules of the Asian Federation contained no mention of fines.

Discussion

42.  In summary, there was no direct evidence that the second applicant knew that the fine of US$10,000 that he was asked to pay was in fact a bribe to be paid to Chua (or any other senior member of the Asian Federation) to enable him to lift the suspension.  That being the case, the judge recognized that it was for her, on the basis of the primary facts that she was satisfied had been proved, to determine whether the only reasonable inference to be drawn from those primary facts was that the second applicant did have such knowledge.  She concluded that, on the facts found, it was the only reasonable inference open to her.  She said (paragraph 253):

“Although there was no evidence of an express agreement, I come to the only irresistible inference on all the evidence before me that D2 [the second applicant] had tacitly agreed to his money being deducted to pay the bribe to shorten his suspension.”

43.  As to the primary facts upon which she drew the inference, the judge said the following (paragraphs 251 – 253 inclusive):

“ I was satisfied D1 and D2 knew that if he continued to compete shortly after the Korea Games as if no doping violation had been committed he could keep his reputation as a clean first class athlete and also be entitled to continue to receive money from the HKSI as an elite athlete. This suited both D2 and the [Hong Kong Association] as they would both come out as winners of this arrangement.

D2 did not have to pay over any money as the [Hong Kong Association] had his money from his government funding and [the Hong Kong Association] had not paid D2 even up until trial. This was a convenient and practical way to pay for the shortening or lifting of the suspension.

            I was satisfied beyond reasonable doubt that D2 agreed to pay US$10,000 so that D1 could talk with or negotiate with [the Asian Federation] or Paul Chua to have his suspension reduced or lifted.  I was satisfied that D1 lifted (sic) the fine on behalf of D2 with D2’s knowledge and with D2’s knowledge that the money would be deducted from his government grants.  The [Hong Kong Association] had accumulated D2’s money from government of about $90,000.  That money had undeniably not been paid to D2.”

44.  No criticism can be made of these findings but they are neutral in the sense that they would apply equally to the applicant’s willingness to pay a fine to the Asian Federation as opposed to what he knew to be a bribe payable to an individual official with that organisation.

45.  In the result, the primary facts upon which the judge felt able to draw the inference she did was limited to her finding that, as an experienced bodybuilding athlete, the second applicant had a duty to know and must therefore have known the rules.  In this regard, she said (paragraph 246):

“ D2 [the second applicant] is an experienced athlete. He had been competing for many years. Athletes have a duty to know the rules and regulations of competition. D2 I found knew the rules, he was not telling the truth in his video-recorded interview that he was not sure about them. If a rule is breached they [athletes] will be penalised in accordance with the rules.”

46.  The inference may of course be drawn that all athletes today, whatever their sport, must know that, if they are found to have taken banned performance-enhancing drugs, they face severe penalties including temporary or permanent banishment from competition.

47.  But can the same broad inference be drawn that all athletes who are experienced in their sport must equally be aware of the provisions in the rules of the regulatory authorities that govern their sport allowing for appeals, reviews or, in appropriate cases, the granting of lesser forms of punishment by way of clemency?  This was not a matter to which the judge turned her attention.  In our view, it was a material omission on her part.

48.  The question may also be asked: can it be inferred that all regulatory bodies enforce disciplinary rules and practices in respect of drug infringements with equal vigour?  May not some regulatory authorities be more lenient, prepared even to attempt, within legitimate boundaries, to find some way around the strict letter of the rules?

49.  This again was an issue implicit in the defence. Was it not equally probable that, on the assurances of Ho, the second applicant believed that, if he paid a fine, the Asian Federation would find some legitimate way around the strict letter of the rules?  In such circumstances, absent relevant evidence, did it remain the only inference open to the judge that the second applicant must have known that his fine was a bribe as opposed to part of a lawful mechanism, no matter if morally questionable, for avoiding the strict letter of the rules?

50.  It is to be noted that in drawing the inference that experienced athletes such as the second applicant have a duty “to know the rules”, the judge qualified that statement by saying that they were the rules of “competition”.  She did not go on to define the breadth and nature of such rules or to say that, on the evidence before her, she was satisfied that they included rules and practices of the Hong Kong Association and the Asian Federation concerning what may broadly be termed matters of discipline.

51.  It is to be remembered that, on the evidence, the applicant, who had no previous finding made against him of substance abuse, had only ever involved himself in the sport as a competitor and not as an administrator.  Indeed, it was his defence that, having been assured that payment of a fine of US$10,000 would result in a successful appeal (of whatever form), he was prepared to pay the fine and place his trust in the hands of the administrators, specifically in the hands of the first applicant, the Chairman of the Hong Kong Association.

52.  In these circumstances, in our judgment, it was not sufficient for the judge, on the limited finding of fact that the applicant must have known the rules of competition, to infer thereby that he must also have known of the true nature and extent of the possibly more arcane rules related to disciplinary proceedings, considerations of clemency and matters of that kind, matters which in a great many international sports are more the province of the administrators than the athletes.  If there was evidence upon which the judge was able to draw the inference that the applicant must also have known of these rules it was incumbent on her to identify that evidence.  This, with respect, she failed to do.

53.  In the circumstances, we were drawn to two conclusions; first, that the judge failed adequately to set out the primary facts upon which an irresistible inference could properly be drawn that the applicant must have known that he was in truth paying a bribe to an individual rather than some form of a fine to a regulatory body and, second, that, on the totality of the evidence as we understood it, such primary facts as could be demonstrated were simply not sufficient to found any such inference.